OWENS -CORNING INDIA P.LTD ( FORMLERY KNOWN AS OWENS CORNING INDIA LTD IT ITS CAPACITY AS A REPRESENTATIVE ASSESSEE OF OWENS CORNING INC(USA), MUMBAI V. ADDL DIT (IT) RG 4, MUMBAI

ITA 177/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1898 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 04-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J D MISTRY N IRAJ SHETH
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.177/MUM/2013 ASSESSMENT YEAR: 2007-08 M/S ONES-CORNING INDIA PVT. LTD. (FORMERLY KNOWN AS OWENS CORNING (INDIA) LTD.) IN ITS CAPACITY AS A REPRESENTATIVE ASSESSEE OF OWENS CORNING INC. (USA) , ALPHA BUILDING, 7 TH FLOOR, HIRANANDANI GARDENS, POWAI, MUMBAI-400076. PAN: AAACO3242R VS. THE ADDL. DIRECTOR OF INCOME-TAX ( INTERNATIONAL TAXATION), RANGE-4, SCINDIA HOUSE, BALLARD PIER, MUMBAI-400038 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI J.D.MISTRY, N IRAJ SHETH REVENUE BY : SHRI NIMESH YADAV (DR) DATE OF HEARING : 25.08.2015 DATE OF PRONOUNCEMENT : 16.12.2015 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 20/12/2010,CONFIRMING THE ORDER OF PENALTY ORDER PA SSED BY ASSESSING OFFICER (AO) U/S 271(1)(B) OF THE ACT ON THE FOLLOWING GROUNDS O F APPEAL: 1 : 0 LEVY OF PENALTY OF RS. 40,000/- U/S. 271 (1) (B) OF THE INCOME-TAX ACT, 1961: 1 : 1 THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN LEVYING A PENALT Y U/S. 271 (1) (B) OF THE INCOME-TAX ACT, 1961 ON THE APPELLANT. 2 ITA NO. 177/M/2013 M/S OWENS CORNING INDIA PVT. LTD. 1 : 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FA CTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT THERE WA S NO NON-COMPLIANCE ATTRACTING THE PROVISIONS OF SECTION 271 (1) (B) OF THE INCOME-TAX ACT, 1961 AND HENCE THE LEVY OF PENALTY WAS INCORRECT AND ILLEGAL AND THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE HELD AS SUCH. 1 : 3 THE APPELLANT SUBMITS THAT THE IMPUGNED ORDER LEVYING PENALTY U/S. 271(1) (B) OF THE INCOME-TAX ACT, 1961 BE STRUCK DOWN. 2 : 0 RE.: GENERAL: 2 : 1 THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AME ND AND/OR SUBSTITUTE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THE APPEAL. 2. THE BRIEF FACT OF THE CASE ARE THAT THE ASSESSMENT ORDER WAS PENDING BEFORE THE AO/ADIT (IT), RANGE-4, MUMBAI WHO SERVED A NOTICE U /S 143(2) ON THE ASSESSEE ON 21.08.2009 AND U/S 142(1) ON 21.08.2009 FOR FIXING THE DATE OF HEARING ON 17.07.2009 AND SUBSEQUENTLY THE CASE WAS ADJOURNED FOR 24.09.2 009 AND FOR 04.01.2010 , A SHOW CAUSE NOTICE U/S 274 R.W.S. 271(1)(B) WAS ISSUED TO THE ASSESSEE , WHICH REVEALS THAT DESPITE THE SERVICE OF NOTICE U/S 143(2) AND 142(1 ), THE ASSESSEE FAILED TO COMPLY WITH THE TERM AND QUERIES RAISED IN THE NOTICES AND ASSE SSEE SEEK ADJOURNMENT ON THE DATE FIXED AND THUS FAILED TO COMPLY THE TERM OF THE SAI D NOTICE AND ONLY ADJOURNMENT WAS SEEK AFTER THE DATE OF HEARING AND THE PERSON WHO WAS REQUESTING FOR ADJOURNMENT HAS NOT MENTIONED HIS NAME AND CAPACITY. 3. ON THE SHOW CAUSE NOTICE ,THE CASE WAS FIXED ON 15. 01.2010, FOR WHICH REPLY WAS FILED BY THE ASSESSEE ON 13.01.2010 AND ALSO FILED THE SUBMISSIONS DATED 16.01.2010 AND AFTER CONSIDERING THE SUBMISSIONS THE AO INFLIC TED A PENALTY OF RS. 40,000/- I.E. 10,000/- FOR EACH OF THE DEFAULT/FAILURE VIDE ORDER DATED 16.11.2010 AGAINST WHICH AN APPEAL WAS FILED BEFORE THE CIT(A). 4. THE CIT(A) WHILE DISPOSING OF THE APPEAL UPHELD TH E PENALTY IN ITS ORDER DATED 25.10.2012 AGAINST WHICH THE PRESENT APPEAL IS FILE D BEFORE US. 5. WE HAVE HEARD BOTH THE AUTHORIZED REPRESENTATIVE (A R) AS WELL AS DEPARTMENTAL REPRESENTATIVE (DR) OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 6. THE CORE QUESTION FOR OUR CONSIDERATION IS WHETHER THE LATE COMING BY THE AR OF THE ASSESSEE ON THE DATE FIXED WAS INTENTIONAL OR DELI BERATE OR WAS SUFFICIENTLY EXPLAINED IN THE REPLY OF SHOW CAUSE NOTICE. 7. WE HAVE SEEN THAT INITIALLY THE CASE WAS FIXED ON 1 7.09.2009 AT 11 P.M., HOWEVER, AR OF THE ASSESSEE COULD REACH ONLY ON 1.15 P.M. AND E XPLAINED THAT IT WAS THE MONTH OF SEPTEMBER, WHICH IS THE PERIOD OF BUSY SCHEDULE FOR FILING THE CORPORATE RETURNS AND THE DELAY WAS SUFFICIENTLY EXPLAINED TO THE AO. 3 ITA NO. 177/M/2013 M/S OWENS CORNING INDIA PVT. LTD. 8. WE HAVE FURTHER SEEN THAT FOR THE DATE FIXED ON 1 7 TH SEPTEMBER 2009, THE AO LEVIED THE PENALTY FOR LATE ATTENDANCE AS WELL AS FURTHER FOR NON-SUBMISSIONS OF THE DETAIL. AFTER 17.09.2009, THE CASE WAS ADJOURNED FOR 24.09. 2009 ON THAT DATE THE AR OF THE ASSESSEE SUBMITTED THAT OUT OF 19 POINTS/QUERIES RA ISED IN THE NOTICE DATED 21 ST AUGUST 2009 ANSWERS/RESPONSES TO THE 16 QUERIES WERE SUBMI TTED AND FOR REMAINING THE 3 QUESTIONS/QUERIES, THE ASSESSEE REQUIRED CERTAIN DO CUMENT FOR WHICH TIME WAS SOUGHT WHICH WERE FURNISHED LATER ON TO THE AO . 9. AFTER 24/09/2009 HEARING WAS FIXED ON 04.01.2010, O N THE SAID APPOINTED DATE MR. P.M. PARIKH REQUESTED THE ADJOURNMENT ORALLY FOR WH ICH HE WAS ASKED TO GAVE IN WRITING AND AS PER THE CONTENTION OF LD. AR, THE AO WAS NOT AVAILABLE IN HIS OFFICE AND WAS BUSY IN A MEETING AND THE LETTER WAS ACCEPTED B Y THE STAFF AND WHEN, ON 08.01.2010 THE REPRESENTATIVE OF ASSESSEE SOUGHT FR ESH DATE OF HEARING, THE AO INFORMED THAT PENALTY NOTICE HAS ALREADY BEEN ISSUE D TO THEM. 10. WE HAVE FURTHER OBSERVED FROM THE RECORD AVAILABLE BEFORE US THAT THERE WAS ANOTHER ISSUE IN BETWEEN THE PERSON ( AR) WHO HAD APPEARED BEFORE THE AO ABOUT THE PROPER SIGNATURE, NAME AND CAPACITY OF THE PERSON WHO WER E APPEARING ON BEHALF OF C.A. FIRM WHICH WAS REPRESENTING THE CASE OF ASSESSEE TH OUGH WE ARE NOT MAKING ANY OBSERVATION THAT THE PERSON WHO HAD TO APPEAR BEF ORE AO WAS HAVING A PROPER OR DULY SIGNED AUTHORITY OR HIS CAPACITY WAS MENTION ED IN THE AUTHORITY LETTER , IF THERE WAS ANY SHORTCOMING IN THE AUTHORITY LETTER/APPLICA TION, IT MUST HAVE BEEN RECTIFIED AND ALL SUCH PERSON MUST COMPLY WITH THE RULES REGARDI NG THE AUTHORIZATION OF THE PARTIES TO APPEAR BEFORE THE AUTHORITIES CONCERNED UNDER TH E ACT. 11. WE HAVE PERUSED THE RECORD AVAILABLE BEFORE US AND FIND THAT THERE WAS LTTLE DELAY IN ATTENDING THE CASE ON 17.09.2009 AND THE COMPLETE D ETAILS/QUERIES WERE NOT RESPONDED ON 24.09.2009, THOUGH IT WAS NOT SO FATAL ON THE PA RT OF THE ASSESSEE WHO WAS BEING REPRESENTED BY A WELL-QUALIFIED PERSON/AR, WHO COUL D NOT APPEARED ON THE FIXED TIME, DUE TO BONAFIDE REASONS, THOUGH APPEARED LATER ON. IT IS NOT THE CASE THAT NONE APPEARED ON THE DATE FIXED. IT IS WELL KNOWN PRINCIPLE FROM VARIOUS PRONOUNCEMENT OF SUPERIOR COURTS THAT OPPORTUNITY OF HEARING MUST NOT BE SEEM S TO BE GIVEN BUT ACTUALLY BE GIVEN TO THE PARTIES AND MERE TECHNICALITY SHOULD NOT COM E IN THE WAY OF JUSTICE DELIVERY SYSTEM BY THE JUDICIAL OR QUASI JUDICIAL AUTHORITY. 12. AS PER OUR OPINION DELAY/NON-COMPLIANCE WAS SUFFICI ENTLY EXPLAINED TO THE AO AS WELL AS TO THE FIRST APPELLATE AUTHORITY (FAA) AND WE DO NO NOT FIND ANY JUSTIFIED REASONS IN INFLICTING/LEVYING THE PENALTY OF RS. 40,000/- U PON THE ASSESSEE, HENCE THE ORDER OF 4 ITA NO. 177/M/2013 M/S OWENS CORNING INDIA PVT. LTD. THE AO WHICH WAS CONFIRMED BY THE CIT(A) IS SET-ASI DE AND THE APPEAL OF THE ASSESSEE IS ACCEPTED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DECEMBER 2015. SD/- SD/- (R.C.SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 16/12/2015 S.K.PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. $ //TRUE COPY/